The Tamil Nadu Goods and Services Tax (TNGST) Act, 2017 is an important legislation that has been enacted to streamline the taxation system in the state of Tamil Nadu. The Act has been designed to identify and prevent bill traders, who indulge in the practice of issuing fake invoices to claim input tax credits. In this article, we will discuss the TNGST Act, 2017 in detail and understand how it aims to eliminate the menace of bill traders.
The TNGST Act, 2017 is an Act that has been enacted by the Government of Tamil Nadu to levy and collect tax on the supply of goods and services in the state of Tamil Nadu. The Act has replaced the earlier indirect tax regime and has brought in a new regime of taxation. The TNGST Act, 2017 has been designed to make the taxation system more transparent and hassle-free for the taxpayers.
One of the main objectives of the TNGST Act, 2017 is to identify and prevent bill traders. Bill traders are those who indulge in the practice of issuing fake invoices to claim input tax credits. They create a chain of fake invoices and pass on the input tax credit across the chain. This results in a loss of revenue to the government and gives an unfair advantage to the bill traders over the genuine taxpayers.
To identify the bill traders, the TNGST Act, 2017 has mandated the use of electronic waybills (E-waybills). The E-waybills are electronic documents that are used to track the movement of goods from one place to another. The E-waybills contain all the details of the goods being transported, including the quantity, value, and tax paid. The E-waybills are generated online and are linked to the GSTN portal. The E-waybills are checked by the tax authorities to verify the movement of goods and to prevent the misuse of input tax credits.
The TNGST Act, 2017 has also brought in various provisions to prevent bill traders. One of the main provisions is the reverse charge mechanism (RCM). The RCM is a mechanism where the recipient of the goods or services is liable to pay the tax instead of the supplier. This mechanism has been introduced to prevent the misuse of input tax credits by the bill traders. The RCM is applicable to specific goods and services, and the list of goods and services is notified by the government from time to time.
Another provision that has been introduced to prevent bill traders is the mandatory registration of the taxpayers. The TNGST Act, 2017 has made it mandatory for all the taxpayers to register under the Act, and failure to do so attracts heavy penalties. The mandatory registration of the taxpayers has been introduced to keep a check on the bill traders and to ensure that all the taxpayers pay their fair share of taxes.
The TNGST Act, 2017 is an important legislation that has been enacted to streamline the taxation system in the state of Tamil Nadu. The Act has been designed to identify and prevent bill traders, who indulge in the practice of issuing fake invoices to claim input tax credits. The Act has brought in various provisions to prevent the misuse of input tax credits and to ensure that all the taxpayers pay their fair share of taxes. The Act has made the taxation system more transparent and hassle-free for the taxpayers and has brought in a new regime of taxation in the state of Tamil Nadu.
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